Alonso Ancira's power pendulum

Staff Writer
Columbus CEO

(For use by New York Times News Service clients)

c.2013 San Antonio Express-News

For print publication only

By Richard Webner

San Antonio Express-News

July 18th was a good day for Alonso Ancira.

That afternoon, his company, Altos Hornos de Mexico, opened a sleek $2.3 billion steel plant in Monclova, Coahuila, that had been in the works for the better part of a decade. Mexican President Enrique Peña Nieto gave a speech that portrayed Ancira as a dynamic entrepreneur and thanked him for "believing strongly in the development and progress that Mexico expects."

Such comments aren't unusual for Ancira, 61, who spends most weekends on a ranch in Boerne and has become a prominent philanthropist in San Antonio. He's won praise from Peña Nieto and other Mexican politicians for his success as chairman of Altos Hornos, one of Mexico's largest steel producers, which has 23,000 employees and 18 mines in the country.

He hasn't always had such friendly relations with the Mexican government, though. His luck has bobbed up and down depending on whether his favored party, the Partido Revolucionario Institucional, or PRI, or its major opposition, the Partido Acción Nacional, or PAN, has been in power.

When the PAN controlled the presidency from 2000 to 2012, Ancira and his company faced charges of tax fraud and allegations of environmental misdeeds, which he says were politically motivated. The fraud charge, which prompted him to seek exile in Israel, was dropped, but at least one of the environmental allegations stuck, with his company paying to clean up an aquifer that the government says it polluted.

"The two presidents before Peña Nieto weren't my friends," Ancira said, referring to President Vicente Fox, who served through 2006, and President Felipe Calderón, who left office in late 2012. The PAN-controlled government, he said, examined his business through a magnifying glass. "Environment, taxes, anything they could find. Because I do a good job, they couldn't find anything."

His experience north of the border, away from the hurly burly of Mexican politics, has been less rocky.

Ancira bought his ranch in Boerne 19 years ago, following the lead of his cousin Ernesto Ancira, of Ancira Auto Group. Since then, he's gained a reputation as a pillar in the local Mexican-American community largely through his nonprofit, Mexicans and Americans Thinking Together, the goal of which is to strengthen bonds between the two countries and help Mexican immigrants settle in the United States.

"Mexican men tend to want to be perceived as tough and strong, but those who get to know him see that he's a great man, kind and generous," said former Texas Secretary of State Hope Andrade, a senior adviser at MATT.

He has recently garnered some controversy in South Texas, however. Some residents of Eagle Pass see him not as a compassionate community leader but as an insensitive businessman. The Dos Republicas Coal Partnership, an Altos Hornos subsidiary, is trying to open a coal mine in Eagle Pass, but a group of citizens is fighting it. They say the mine will pollute their air and water -- and that the company has been hostile to their concerns.

Asked about the citizens' opposition, Ancira gave assurance the mine would be run lawfully.

"We will operate under Texas law and use U.S. contractors -- top of the line," Ancira said.

Steel magnate

The son of an owner of several mines, Ancira, a graduate of Universidad Anahuac in Mexico City, where he grew up, joined the family business at 26, when he bought a copper mine. Over the next decade and a half, he grew his company with purchases of several other mines.

In the early 1990s, an accident of history and acquaintance launched him to the top of Mexico's steel and mining industries. Mexican President Carlos Salinas de Gortari of the PRI began to privatize Mexico's steel industry -- and Salinas' wife was "like a sister" to Ancira's wife, Ernesto Ancira said. The relationship helped him and a small group of investors, including many of his brothers, snatch up Altos Hornos. "I have good luck," Alonso Ancira said, reflecting on his career. "I prefer to call it luck and a lot of work. You need to have the right people, and the right momentum to catch opportunities."

The acquisition of Altos Hornos wasn't the only lucky break Ancira has had in his career. When the company went into bankruptcy in 1999 because of a decline in the steel market and the Asian financial crisis, it took advantage of a quirk in Mexican law that allowed it an indefinite suspension of payments; 14 years later, it still hasn't paid back its creditors. In 2000, a new bankruptcy law was passed that wouldn't have allowed the move.

Maybe more than luck, several of Ancira's critics, and some of his friends, have said his personal connections played a part in putting him in a position of power in the Mexican economy.

"He is very well-connected," said Dr. Raul Ramos, a San Antonio surgeon and longtime friend. "A lot of people know him. He has access to a lot of people."

Ancira rejected the description. As evidence, he cited the charge of tax fraud in 2004 that sent him on a 19-month exile in Israel, which has no extradition treaty with Mexico. The government accused Altos Hornos of failing to pay the equivalent of $2 million in corporate taxes in the midst of its bankruptcy proceedings.

"I was forced to live in Israel by President Fox," Ancira said. "If I were well-connected, I wouldn't have been persecuted by this guy."

The fraud charges were dropped in 2006, the same year Fox left office, and Ancira returned to Mexico to resume control of Altos Hornos.

Luck and initiative combined to make his stay in Israel a productive one, though. While driving to a beach resort, he spotted the abandoned Timna copper mine which, legend has it, was established by King Solomon. The Israeli government gave him permission to buy the mine and later helped him with a $37 million grant.

Back in Mexico -- and with the PRI now returned to power -- Ancira could get help with his latest goal of expanding into the nation's shale gas industry. Mexico's Constitution bans private companies from extracting oil and gas, but Peña Nieto has said he wants to change that. In June, Ancira said he hopes to tap into shale gas reserves in northern Mexico -- the extension of the Eagle Ford Shale in South Texas -- and become "the next Marathon Oil," according to published reports.

Across the border

Ancira, who holds both U.S. and Mexican citizenship, has a presence on both sides of the border, as commuters on Highway 281 are aware. His name, on the Alonso Ancira Tower at the University of the Incarnate Word, flits through the peripheral vision of thousands of San Antonio commuters every day.

When he bought his ranch in the area nearly two decades ago to be closer to family and friends, he was among the first of a wave of wealthy Mexicans who have bought second homes in San Antonio in recent years.

"He's a pioneer," Ramos said. "It was before this avalanche of people coming from Mexico."

Since then, Ancira has become known for his philanthropy in the area. In addition to UIW, he's contributed to the effort to restore the missions in San Antonio and to St. Mary's Hall, where his daughter went to school.

Although he was born and raised in Mexico City, Ancira has always had links with the United States. His father was a Mexican-American who returned to Mexico during World War II to take advantage of the increased demand for sugar.

Almost every week, Ancira shuttles in his private plane between the United States and Mexico, where he has four homes: one in Mexico City, another in a secure compound in Monclova, a vacation home on the Pacific coast and a ranch in the northern part of the country. Most of his business interests are in Mexico, but his family lives on his ranch in Boerne.

Ancira's binational identity has found expression in MATT, his nonprofit. Its activities include English classes, grants to Latino students and advocacy for immigration reform.

"He thinks Mexico and the U.S. have more than a border that brings them together -- people, culture, traditions, so much," said Aracely Garcia-Granados, MATT's chief executive officer.

MATT received $2.6 million in contributions in 2010, with $1.26 million of that used for employee salaries and consulting fees, according to Internal Revenue Service filings. Ancira is its main contributor, Garcia-Granados said.

Environmental conflicts

George and Martha Baxter of Eagle Pass and Victor Perez of Piedras Negras, Mexico, are working on their own project of cross-border cooperation.

In August 2012, they met at the halfway point on a bridge across the Rio Grande to shake hands and snap a few photos. It was a symbol of their joint struggle against Altos Hornos, which they say has been dismissive of their complaints about pollution from its mines.

For the past two years, the Baxters and other Eagle Pass residents have been fighting Dos Republicas, an Altos Hornos subsidiary that wants to put a coal mine a few miles from the city. They say the mine would envelop the town in coal dust and could cause wastewater leakage into the Rio Grande upstream of the town's water supply. Perez, a professor at the Universidad Autónoma de Coahuila, has been in a similar struggle in Piedras Negras. As president of Consejo Ciudadano por un Piedras Negras Mejor, an environmental group, he's worked for years to keep another Altos Hornos subsidiary, Micare, from operating an open-pit mine near the city. The mine has released gas and coal dust into the air, he said.

Neither Perez nor the Baxters have met Ancira, or even seen him -- and that's what bothers them. The Baxters said the only representatives of Altos Hornos they've met are its American attorneys.

"He has never thought we were worthy of him talking to us, let's put it that way," Martha Baxter said. "He sends his minions to do his work, like he has it in his pocket -- that's his attitude."

Ancira, for his part, takes an optimistic view on the mine's potential impact on Eagle Pass. He said it would uplift the economy in Maverick County, one of the poorest in the nation, and that his companies are conscientious about the environment.

"We try to do a lot for the environment," he said. "We are coal miners and steel miners, and that requires that we are tied to the environment . . ."

Altos Hornos, however, has a spotty environmental record in Mexico, according to articles from several Mexican news sources.

In 2003, Profepa, the Mexican environmental agency, forced Micare to temporarily close some of its mines after it concluded they were polluting an aquifer near Piedras Negras and damaging local wells and farmland. In the end, Micare paid a fine of 4.2 million pesos , the equivalent of $400,000.

There was another showdown between Altos Hornos and Profepa in 2010, when the agency threatened to close the company's Monclova plant for failing to meet environmental standards. Profepa dropped its investigation after Ancira and government officials complained of harassment from the agency and noted the effect the closure would have on the local economy.

Now that the PRI's Peña Nieto is in power, the future is looking brighter for Ancira, several of his friends agree. Ramos described Peña Nieto's visit to the new steel plant as an affirmation of friendship.

"For the president to open the plant in Monclova, that was a very important thing," Ramos said.

A video of the July 18 event in Monclova demonstrates Ancira's comfort with the new PRI government. On a stage in front of a crowd of workers, he sits happily next to Peña Nieto. Behind them is a sign of the new plant's name: Project Phoenix.

Altos Hornos

de Mexico

Revenue: $3.27 billion (2011)

Net income: $178 million (2011)

Employees: 23,000 in Mexico


Minera del Norte SA de CV

-- Dos Republicas Coal


-- MIMOSA Unit

-- MICARE Unit

AHMSA Steel Israel

Nacional de Acero SA de CV

Hojalata Mexicana SA de CV